the Chinese steelmaker Baowu takes an interest in Simandou

the Chinese steelmaker Baowu takes an interest in Simandou
the Chinese steelmaker Baowu takes an interest in Simandou

(Agence Ecofin) – Simandou is one of the largest unexploited iron ore deposits in the world. Located in Guinea, it is made up of four blocks co-owned by Chinese companies. Baowu, the world’s largest steel producer, has just strengthened its involvement in the project.

In Guinea, China Baowu Steel Group has purchased an undisclosed stake in two of the four blocks of the Simandou deposit owned by Winning Consortium Simandou. The largest Chinese steelmaker is thus strengthening its involvement in the development of one of the largest unexploited iron ore deposits in the world.

It is since 2022 that Baowu has expressed his interest in acquiring shares in Simandou, before signing in September 2023 a partnership agreement with WCS to accelerate the development of the deposit.

In January 2024, the world’s largest steel producer announced a fundraising of 10 billion yuan (approximately $1.4 billion), of which at least 70% will be allocated to Simandou.

As a reminder, the two other Simandou blocks belong to another consortium also involving Chinese companies and led by the Australian giant Rio Tinto. After years of delays and postponements, the end of construction work on the infrastructure necessary for exploiting the deposit is scheduled for 2025 and the first tonnes of iron ore should arrive on the market in 2026.

According to an IMF note published in May 2024, the entry into production of Simandou in 2025 would increase Guinea’s GDP by 26% in 2030, compared to a reference scenario without the project. The project would lead to an appreciation of the Guinean currency of around 3% in 2025 and 2% in 2030, the document specifies.

Also read:

01/31/2024 – Guinea: the world’s largest steel producer raises $1.4 billion for the development of the Simandou project

-

-

NEXT Gas prices, DPE, savings plan… What’s changing on July 1, 2024